Insight into what one can expect from an IFTA audit, common pitfalls to be aware of, and critical strategies on how to pass an IFTA audit.
Keys To Compliance Part 2
TransReport Services 2017 Outlook: Keys To Compliance
At the start of each New Year our company sits down as a team and discusses our goals. We also discuss the types of changes we can expect to see in carrier regulatory compliance as well as look at new business opportunities such as providing a new service or offering an additional fleet management product to our customers.
If one thing was clear from this years meeting it is that 2017 is sure to be a year full of change and we have compiled a list of the top 2 keys to compliance for trucking fleets. This 2-part series will examine each key to compliance for the trucking industry and the changes that are associated for this upcoming year.
Key 2: IFTA Reporting Services
The International Fuel Tax Agreement, or IFTA, is a cooperative agreement among the 10 Canadian provinces and 48 American states that makes it easier for inter jurisdictional carriers to report and pay taxes on the motor fuels they use. The creation of IFTA has served to ease the burden of reporting by allowing carriers to submit a single tax return to their home jurisdiction which then distributes any tax due to member jurisdictions on the carrier’s behalf.
Many carriers, including some of our clients are still doing it the old school way; having their drivers complete an Individual Vehicle Distance Record (IVDR) and record their odometer readings each time they cross a state or provincial border. Their drivers compile their fuel, toll and bridge crossing receipts and submit them together with the IVDR to their office after each trip. Under this scenario, reporting agents such as TransReport receive all documentation, run audit checks and manually input into tax calculation software in order to file IFTA and weight distance tax returns.
GPS Data For IFTA Reporting
Over the last few years we have gradually begun to see a change in how this documentation and information is being generated. The wide scale adoption of GPS systems and utilization of fuel cards in the trucking industry means that we commonly receive GPS distance reports broken down by unit and fuel card summary spreadsheets or print outs. We see reporting to continue trending this way as we get closer to the ELD Mandate compliance date. As an IFTA fuel tax reporting service provider we have naturally faced many IFTA audits.
In fact, in looking back on the last 25 years of business we have successfully navigated our clients through dozens of IFTA audits. What has helped our customers the most has been our attention to detail.
- TransReport Services Inc.
GPS distance and “automated IFTA reporting” certainly helps to remove a large part of the paper shuffling but it can also give carrier a false sense of security. What many carriers may not realize is that GPS distance is subject to inaccuracies. When you are audited, it will not be enough to point to the reports you’ve pulled off your GPS or ELD platform. In the IFTA auditing world, odometer readings are king and you would be wise to keep a close eye on their accuracy. If your GPS tracking or ELD system has even a short term glitch, stops working for a segment of a trip or any other technological problem occurs you are responsible for determining and allocating individual vehicle distance breakdowns. Should an auditor uncover gaps in your GPS records you could find yourself in a position where you are facing thousands of dollars in reassessments, penalties and interest (and that’s just for the fuel taxes). Remember that your audit results for a small number of units may be applied to all IFTA qualified units fleet wide.
Overall, utilizing GPS distance for your IFTA reporting does help to speed up the reporting process and eliminates the manual processing of hard copy IVDR’s. If you can ensure that jurisdictional distances, odometer readings, fuel purchase records and highway toll distances are accurate and verifiable you will likely be well protected at audit. We realize that IFTA reporting has been and will continue to be an important yet tedious task. If you’re looking to utilize technology to assist with and improve upon your IFTA reporting, we highly recommend having the right system in place. Reach out to TransReport today to learn how we are assisting carriers with their GPS data for IFTA Reporting.